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September 23rd, 2013 12:26 pm
North Carolina Joining the Low Tax Movement

North Carolina will soon look a lot more appealing to Americans looking to make more money, start a new business or live the good life.

The Tar Heel state recently overhauled its tax code for the better. The wise policy decisions are “expected to move the Tar Heel State from 44th to 17thplace in the Tax Foundation’s State Business Tax Climate Index,” according to an op-ed in Forbes magazine.

What does that mean for North Carolina? Well, if other low-tax states like Texas, Florida, Tennessee and Washington are any indication, North Carolina will soon be blessed with “more job creation, capital formation and higher wages.”

AccountingWEB, an accounting news website, pointed out last month that state tax rates are redrawing the population map – and redirecting money around the country.

“A recent review of IRS data from 1040 forms filed in 1995 through 2010 showed a clear pattern of people moving to states with lower personal income tax rates, especially those with no tax,” according to the website.

From 1995 to 2010, “ the nine states that have no personal income tax – Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming – gained $146.2 billion in adjusted gross income (AGI) .” Collectively, however, “the areas with the highest personal income tax – California, Hawaii, Oregon, Iowa, New Jersey, Vermont, New York, Maine, and Washington, DC – lost $107.4 billion AGI.”

“Looked at another way, the ten states with the lowest per capita state and local tax burden netted an increase of $69.9 billion in AGI. The ten states with the highest state and local tax burden per capita lost a whopping $139 billion in AGI,” AccountingWEB found.

North Carolina leaders are wise to realize that taxes matter and act accordingly. The move, as the research shows, will mean more people with more money to create more jobs for the state.

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